All posts tagged Regulaton

Stephen Cecchetti, head of the monetary and economic department of the Bank for International Settlements, sat down with The Wall Street Journal in Frankfurt Tuesday to discuss the outlook for new Basel III bank regulations, the global banking system and his “glass-half-full” views on the world economy. Here are excerpts from the conversation:

There was an incredibly successful push to get the basics of regulations agreed. We have to make sure that we don’t get back to the world where it takes us 10 years to agree on a new regulatory structure. I think it is also really important that there be global agreement on the standards and that the standards be implemented uniformly and in a timely fashion, otherwise you run a risk of a race to the bottom.
We’ve got to retain risk sensitivity and we’ve got to retain a leverage ratio but computing these things is not easy. We should agree on simple rules to compute them but ensure that the level of capital is high enough that any mistakes we make in the computation are immaterial.
If people want simpler regulation then they need simpler institutions but if they’re going to make complex institutions there’s going to have to be complex regulations. Read More »

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